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Third-quarter boost belies a recession Hampel in iPoliticoi

WASHINGTON (7/16/08)—The economy may see a slight uptick soon as a result of the recent delivery of 112 million federal stimulus checks, but that relief just belies the year’s recession, according to Bill Hampel, Credit Union National Association (CUNA) chief economist. “The third quarter will look good because of the tax rebate checks,” said Hampel, in a recent article in Politico. The article broadly focused on a point that the country’s next president will “inherit an economy on the brink of a full-blown recession.” In his comments, Hampel added that, “As soon as that money is spent, the economy will slip back to just above or in a recession.” Economists generally argued in the piece that even if the housing and financial markets start to regain stability by the end of the year, low spending rates for consumers would erase any chance of a recovery by then. “Consumers face a perfect economic storm: Consumer confidence is its lowest level in about 30 years. Most Americans have lost value in their homes and stocks. And they find it harder to get new lines of credit and have little savings and high debt,” wrote reporter Lisa Lerer. Others who contributed views to the article included: Jason Furman, economic advisor to Barack Obama, the U.S. Senator from Illinois and presumptive Democratic nominee for the 2008 presidential election; and former Sen. Phil Gramm (R-Texas), considered a top economic advisor to Sen. John McCain (R-Ariz.), Obama’s Republican counterpart in the presidential race.